How Walmart’s Low Wages Impact the Economy

Around the world, wealthy countries might be creating jobs but they’re worse jobs that pay lower wages and offer fewer benefits. In the United States, one of the largest employers of low-wage workers is Walmart. About 1.4 million Americans work for Walmart — the company has about two million employees worldwide. And the average hourly wage for a Walmart associate? An estimated $8.81 an hour. That’s 28 percent less than employees earn at other large retailers. At the same time Walmart brought in $17 billion in profits in 2012 and in the fourth quarter of 2012 saw its profits rise 8.6 percent.

Those are some statistics cited in a new report by U.S. Congressional Democrats on the cost of Walmart paying employees low wages.

As the study shows, just one store can be a major drain on the economy. Because if Walmart saves money by not paying workers a living wage, those workers turn to government aid programs. As the report puts it: “When low wages leave Walmart workers unable to afford the necessities of life, taxpayers pick up the tab.” [...]

But what would it look like if retailers like Walmart paid their workers more? A study last year by Demos provides some insight. It found that if wages rose to the equivalent of $25,000 per year for full-time work, more than 700,000 Americans would be lifted out of poverty, GDP would grow between $11.8 and $15.2 billion over the next year, and employers would create 100,000 to 132,000 additional jobs.